Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
Date: Friday, 9 June 2017
KIERAN GILBERT: Let’s go to the Finance Minister, Mathias Cormann. We have seen the Pound Sterling down heavily in the wake of that exit poll, which suggests a hung parliament. The markets don’t like uncertainty.
MATHIAS CORMANN: The election has now taken place. There is still a lot of counting to go on. This is of course a matter for the British people. The Australian Government will continue to work closely with the government that the British people have elected. I think that it will be a long night of counting.
KIERAN GILBERT: Indeed it will. Let’s look at the situation in relation to the Finkel report. I know this is a big focus of the Government’s ahead of the COAG talks, but it is going to be balancing act to try and get Labor on board, but also placate many within your own party. Do you think that this LET, or low emissions target, as it is called will do that?
MATHIAS CORMANN: It is very important for us to get our national energy policy settings right. The status quo would lead to continuous increases in electricity prices and it will not help us address the reliability and energy security issues that we have been facing in recent times. The Finkel review was commissioned after the complete electricity blackout in South Australia back in September last year. It is a report to all governments on the Council of Australian Governments. It will be delivered to the Council of Australian Governments today. As a Federal Government, we will consider the recommendations he makes. We will make judgements in due course. But the overarching objective has got to be to ensure that we can have reliable energy supplies, affordable energy supplies and that we do so in a way that is as environmentally efficient as possible. But the number one objective has got to be to ensure that families and businesses across Australia can have reliable and secure supplies of energy. That we put downward pressure on electricity prices. That we ensure that energy prices can be competitive, affordable. That businesses across Australia can have access to reliable and affordable energy.
KIERAN GILBERT: My understanding of the modelling done by Finkel is that it will see power bills, according to his numbers, down by hundreds of dollars in the decade from 2020 to 2030, through the low emissions target. That has got to be something that can help placate members of your own party room.
MATHIAS CORMANN: I am not going to pre-empt either the recommendations, which are going to be released to COAG today, or the Federal Government’s response to it. What I would say, is that clearly the policy status quo won’t do. The policy status quo has led to instability in the system. It has led to a complete blackout in South Australia. It has led to continuous increases in electricity prices. We do have to ensure that the policy settings when it comes to energy are such that we can have reliable, secure access to energy supplies and that we put downward pressure on prices, that energy is as affordable as it can be for families and for business, but that we continue to be focused on meeting our emissions reduction targets. That we continue to be focused on ensuring that our energy supplies are as environmentally efficient as possible.
KIERAN GILBERT: But you know the industry has been complaining about the lack of certainty, the industry more broadly, the power industry specifically. Does some of your colleagues need to recognise that companies won’t invest if they don’t understand that there is going to be bipartisanship in many of these policies? Because if they invest in something with a life cycle of thirty, forty years they need more than just a four year guarantee, they need both sides of politics on board don’t they?
MATHIAS CORMANN: There is no doubt that in order to attract additional investment into a capital intensive industry, we need policy certainty. Certainly a bipartisan approach to energy policy would help deliver policy certainty and as such additional investment into energy supplies. That is certainly something that Australia needs. That is as much a challenge though for the Labor party. The Labor party has a history of taking an ideological approach here which seriously drove up electricity prices, which seriously increased the problem that Australia is facing today. The reason we had an electricity blackout for the whole state of South Australia is because of the ideological pursuit of excessive levels of renewable energy without actually putting in place the necessary features in the system that ensured that this could actually be done in a way that still ensured stability in the system. All sides of this debate have got to come together and focus on the right policy settings to ensure that we can have reliable, secure supplies of electricity, supplies that are as affordable as possible and that are as environmentally efficient as possible.
KIERAN GILBERT: You spoke about the ideology on one side of politics, but there has been a fair bit on your own side. Will this be enough to placate the likes of Tony Abbott specifically, but those of a like mind who are worried about anything in relation to or is critical of the renewable energy target, will he cop a clean energy target?
MATHIAS CORMANN: I think that all of us on the Coalition side are focused on a policy framework that facilitates affordable, reliable energy supplies. That is what all of us on the Coalition side are focused on. The challenge really is for Labor to walk away from ideology and to start focusing on practical policy solutions to what is a very serious economic challenge for Australia.
KIERAN GILBERT: But is everyone really on board? Is that genuine that you are confident that they are all on board?
MATHIAS CORMANN: I am confident that all of us are on board with the need to ensure reliable and affordable supplies of energy. Absolutely. I am confident that all of us are on board with ensuring affordable and reliable energy supplies in a way that is as environmentally efficient as possible. That is clearly something that from the Coalition side we are focused on. Labor’s history in this is not to focus on affordability, but to pursue ideological approaches which drove up the cost of electricity. We have to ensure that the policy settings are in place to facilitate additional investment into energy generation, facilitate ultimately a reliable, secure, sustainable supply of energy for families and for business in a way that is as affordable and as environmentally efficient as possible.
KIERAN GILBERT: The climate wars have caused a lot of damage in terms of uncertainty in part pushing up prices in and of itself. Do you think we might see an end to the climate wars?
MATHIAS CORMANN: The challenge for Australia and this is an important economic challenge for all of us, is to come up with the policy settings, the energy policy settings, that facilitate affordable, reliable, secure supplies of energy in a way that is as environmentally efficient as possible. That is clearly what the Finkel Review is all about. That is why the Council of Australian Governments commissioned the Finkel review. That report is now being delivered to COAG today. Governments around Australia, including the Australian Government, will consider the recommendations and make decisions in due course on how best to move forward.
KIERAN GILBERT: Finance Minister Mathias Cormann, I appreciate your time this morning, thanks very much for that.